China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2016
August 2016
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior
executives of China National Accord Medicines Corporation Ltd. (hereinafter
referred to as the Company) hereby confirm that there are no any fictitious
statements, misleading statements, or important omissions carried in this report,
and shall take all responsibilities, individual and/or joint, for the reality, accuracy
and completion of the whole contents.
All directors are attended the Board Meeting for report deliberation.
The Company has no plans of cash dividend distributed, no bonus shares and has
no share converted from capital reserve either.
Lin Zhaoxiong, principal of the Company, Wei Pingxiao, person in charger of
accounting works and Wang Ying, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of the Semi-
Annual Report 2016 is authentic, accurate and complete
Content
Semi-Annual Report 2016 ................................................................................................................. 2
Section I Important Notice, Contents and Paraphrase .................................................................. 5
Section II Company Profile ............................................................................................................... 7
Section III Accounting data and summary of finnaical indexes .................................................... 9
Section IV Report of the Board of Directors ................................................................................. 20
Section V Important Events ............................................................................................................ 38
Section VI Changes in shares and particular about shareholders............................................... 42
Section VII Preferred Stock ............................................................................................................ 42
Section VIII Directors, Supervisors and Senior Executives ....................................................... 43
Section IX Financial Report ............................................................................................................ 44
Section X Documents Available for Reference ........................................................................... 186
Paraphrase
Items Refers to Definition
The Listed Company, Company, the Company,
Refers to China National Accord Medicines Corporation Ltd.
China National Accord, the Group
Sinopharm Holding Refers to Sinopharm Group Co., Ltd., the controlling shareholder of the Company
“Twelfth Five-Year” Refers to Year of 2011 to 2015
Company Law Refers to Company Law of the People’s Republic of China
Securities Law Refers to Securities Law of the People’s Republic of China
Yuan, 10 thousand Yuan, 100 million Yuan Refers to RMB, RMB 10 thousand, RMB 100 million
Terminology: Refers to
Direct selling Refers to A sales method that the drug directly sold to the hospital
GMP certification Refers to Good Manufacture Practice of Drugs certification
GSP certification Refers to Good Supplying Practice certification
That is CMS, and information system processing workflow &
Supply Chain Management Refers to
procurement, inventory & sales documents
Company profile Refers to
Sinopharm Refers to China National Pharmaceutical Group Corporation
Sinopharm (CNCM LTD) Refers to China National Medicines Corporation Ltd.
Sinopharm Holding Guangzhou Refers to Sinopharm Holding Guangzhou Co., Ltd.
Sinopharm Holding Guangxi Refers to Sinopharm Holding Guangxi Co., Ltd.
Sinopharm Holding Liuzhou Refers to Sinopharm Holding Liuzhou Co., Ltd.
China National Zhijun Shenzhen Refers to China National Zhijun (Shenzhen) Pharmaceutical Co., Ltd.
China National Zhijun Suzhou Refers to China National Zhijun (Suzhou) Pharmaceutical Co., Ltd.
Zhijun Medicine Trading Refers to Shenzhen Zhijun Medicine Trading Co., Ltd.
China National Zhijun Shenzhen Pingshan Refers to China National Zhijun (Shenzhen) Pingshan Pharmaceutical Co., Ltd.
Main Luck Pharmaceuticals Refers to Shenzhen Main Luck Pharmaceuticals Inc.
Section II. Company profile
I. Company Profile
Short form for share Sinopharm Accord, Accord B Code for share 000028, 200028
Listing stock exchange Shenzhen Stock Exchange
Chinese name of the Company 国药集团一致药业股份有限公司
Abbr. of Chinese name of the
国药一致
Company(if applicable)
English name of the
China National Accord Medicines Corporation Ltd.
Company(if applicable)
Abbr. of English name of the
Sinopharm Accord
Company(if applicable)
Legal Representative Lin Zhaoxiong
II. Contact person and ways
Secretary of the Board
Name Chen Changbing
Contact adds. Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen Guangdong
Tel. +(86)755 25875195
Fax. +(86)755 25195435
E-mail 0028@szaccord.com.cn; gyyz0028@sinopharm.com
III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or
not
□ Applicable √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period, found
more details in Annual Report 2015.
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation place
for semi-annual report have no change in reporting period, found more details in Annual Report 2015.
3. Registration changes of the Company
Whether registration has changed in reporting period or not
□ Applicable √ Not applicable
Date/place for registration of the Company, registration number for enterprise legal license, number of taxation registration and
organization code have no change in reporting period, found more details in Annual Report 2015.
Section III. Accounting data and summary of financial indexes
I. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error
correction or not
□Yes √ No
Increase/decrease in this
Current period Same period of last year
report y-o-y
Operating revenue (RMB) 14,089,052,871.88 12,813,803,166.77 9.95%
Net profit attributable to shareholders of
542,122,083.86 387,319,252.33 39.97%
the listed company(RMB)
Net profit attributable to shareholders of
the listed company after deducting non- 404,509,408.41 373,659,153.79 8.26%
recurring gains and losses(RMB)
Net cash flow arising from operating
492,634,062.23 448,239,578.73 9.90%
activities(RMB)
Basic earnings per share (RMB/Share) 1.495 1.068 39.98%
Diluted earnings per share (RMB/Share) 1.495 1.068 39.98%
Weighted average ROE 9.53% 7.85% 1.68%
Increase/decrease in this
End of current period End of last period report-end over that of last
period-end
Total assets (RMB) 14,485,586,577.06 13,218,349,735.31 9.59%
Net assets attributable to shareholder of
5,886,726,195.51 5,453,393,694.55 7.95%
listed company(RMB)
II. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under both IAS (International Accounting
Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules
and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under both foreign accounting rules and
Chinese GAAP (Generally Accepted Accounting Principles)
III. Items and amounts of extraordinary profit (gains)/loss
√ Applicable □ Not applicable In RMB
Item Amount Note
The income from assets disposal
Gains/losses from the disposal of non-current asset (including the
8,792,371.94 received by subsidiary Guangxi
write-off that accrued for impairment of assets)
Logistics
Governmental subsidy calculated into current gains and
losses(while closely related with the normal business of the Vary special subsidies and finance
7,581,599.85
Company, excluding the fixed-amount or fixed-proportion discount received in the Period
governmental subsidy according to the unified national standard)
Reversal of impairment reserve for account receivable with
1,309,568.96
separate impairment testing
Mainly due to the hosted services
offering to Sinopharm Holding
Trustee fee obtained from entrusted management 353,773.59 and China National
Pharmaceutical Foreign Trade
Corporation
The default fine of overdue
Other non-operating income and expenditure except for the
2,640,765.63 payment for equity transfer
aforementioned items
received from Xinyu Boda
Subsidiary disposal and revaluation gains/losses of long-term
121,754,182.26
investment
Less: impact on income tax 4,643,039.53
Influenced amount of minority shareholders’ equity (after tax) 176,547.25
Total 137,612,675.45 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the
Public --- Extraordinary Profit/loss.
Section IV. Report of the Board of Directors
I. Introduction
2016 is the first year of Company’s 13th Five-Year Plan and also a year for the enterprise integration, restructuring
and transformation. Looking back on the first half year, confronted with the external policy changes and industry
changes, and faced with the challenges of internal business restructuring, rebuilding infrastructure, and employee
transition, the Company unifies the thoughts, clarifies the thinking, adapts to the changes, and takes the strong
foundation, brave innovation, risk control, and security compliance as the main line of business, continues to
strengthen the basic management, improve the control efficiency, improve the quality and efficiency of traditional
businesses and expand the innovation businesses, so that the Company has preferably completed all key tasks of the
first half year.
(I) Overall economic performance of China National Accord in the first half of 2016
China National Accord achieved operating income of 14.089 billion Yuan, with a year-on-year growth of 9.95%;
achieved net profit attributable to parent Company of 542 million Yuan, with a year-on-year growth of 39.97%.
Distribution division achieved operating income of 13.305 billion Yuan, with a year-on-year growth of 11.23%;
achieved net profit attributable to parent Company of 235 million Yuan, with a year-on-year growth of 7.68%.
Pharmaceutical division achieved operating income of 787 million Yuan, a decrease of 8.39% on a year-on-year
basis; achieved net profit attributable to parent Company of 138 million Yuan, an increase of 12.56% on a year-on-
year basis.
(II) Major work the Company has completed in the first half of 2016
1. Steadily advance the major asset restructuring
The Company organizes the intermediaries to fulfill their duties and smoothly implements the asset restructuring.
In the progress, the Company has carried out the roadshow in Beijing, Shanghai and Shenzhen, explained the
restructuring project and its strategic importance to the Company’s development to all investors, and has got
supports and acceptance of many investors, the restructuring bill has been unanimously passed by the meeting of
stockholders. At the end of June, the Company has received the \"Administrative license application acceptance
notice of China Securities Regulatory Commission\".
2. Launch the development planning formulation for retail and diagnosis and treatment
In the strategic positioning, keep a foothold in Guangdong and Guangxi, take advantages of the integration of
wholesale and retail and the operational integration, make the pharmacy brands which form an effective synergy
and complementary mechanism for the medical cooperation with hospitals, establish the professional DTP health
service network mainly based on new special medicines and medicines for chronic diseases, further cultivate the
market segment for wholesale and retail, and develop new profit growth points of distribution.
On the development tasks, build a competitive DTP professional health service system having the best service and
the fastest delivery; keep the leading position in the industry, and become the preferred \"medical cooperation
pharmacy\" partners to hospitals; innovate the development patterns of retail business, and meet the multi-level and
diversified health service needs.
3. Control the operational risks and consolidate the results of \"two reduce one decrease\"
Performance-oriented, and clarify responsibilities; implement the \"four linkage\" policy. Performance and
remuneration link with the Company and individual annual evaluation; in accordance with the principle of
\"reasonable collect and release, proper control and increase\", optimize the internal resource allocation, optimize the
marketing variety structure, and improve the contribution degree of high quality customers and the market shares;
combine with the requirements of \"Four Clean-ups\", sort out the inefficient varieties and inefficient customers, and
enhance the profitability of inefficient enterprises; strategically carry out the medical cooperation projects, and
periodically evaluate the input-output results; strengthen the capital budget management, and strictly control the
overall capital scale, including bank credit, annual capital scale merit and scale increment.
4. Establish long-term mechanism for compliance management, and strengthen the implementation and supervision
of responsibilities
The Company signs the liability statement of compliance management and honest business layer upon layer;
improve the system and internal control system, strengthen the compliance awareness and implementation of
responsibilities, and initially establish the long-term mechanism for compliance management; form a joint
inspection mechanism for finance, internal control and audit to realize multi-sectoral linkage and comprehensively
investigate the potential risks.
In the first half year, the Company has completed the comprehensive investigation to high-risk bu
